Most Important Investment Lessons from Modi’s Defeat in State Elections

Wednesday, 12 December 2018

Most Important Investment Lessons from Modi’s Defeat in State Elections

Greetings from Hitesh! The verdict is out. Modi lost against Rahul. My focus has always been on learning. So, I have learned and re-learned certain lessons. I am sharing with you all.

Strong Fundamentals and Price Movement: -

Normally, when an investor buys strong fundamental shares – he has the inner expectations that share price must move up fast. This does not necessarily happen in the market in short run.

Apparently, Modi is the most fundamentally strong company (if we see him as a company for the time being) compared to RAHUL. Rahul is Microcap against Large cap MODI. But the market has given thumbs up to RAHUL and not to MODI.

Rakesh has apparently bought all strong fundamental companies in his core portfolio of about 35 odd companies. Only 5 had moved up.

Reliance industry did not move from 2009 till 2016!! ITC has not moved up since last 2 years or so. There can be many such examples in market.

For a SCRIP to move up – there are N number of factors and to judge the interplay of all the factors is not always possible for the SMARTEST of the INVESTORS.

If MODI and RAKESH can go wrong, so you can.

Lesson No. 1: - BE HUMBLE and MANAGE YOUR EXPECTATIONS. Market KNOWS the BEST.

Don’t Commit what you are not going to do: -

One of the NEWS papers today said – “GAPPU FAIL HO GAYA and PAPPU PASS HO GAYA.” Despite strong work ethics, Modi carries an image of FEAKOO or GAPPU.

He promised ACCHE DIN but last 4 years were worst days for the middle-class people and middle and small business guys in their life. He harassed the people with his policy measures.

He promised to recover BLACK MONEY and give it back to the people. It was the BOGUS and ILLOGICAL from the day one – but the people and PAPPU hold on to it and he faced the music in election due to that.

He took DRACONIAN STEP (as per his retired Economic Advisor) of DEMONETISATION and made the life worst for the people. He failed 100% in the same. After two years, UDAY KOTAK also admitted the same last week.

He promised RAM MANDIR. For the last 4 years – he did not do anything and now suddenly, the issue is back.

The best way would have been to come to the public and accept the mistakes for making false promises or taking wrong decisions.

Lesson No. 2: - When Market gives you profit, it is not doing any favour to you and when market gives you losses, it is not taking revenge on you. So, be honest with the market.

Communications with the people: -

Mr.Modi has done the best international networking in the history of Indian Prime Ministers. He has the friends in all corners of the world. He has earned a name of NRI prime minister.

The missing link is he failed to communicate with the inside people. He just did MAAN KI BAAT. But it was one side and useless for most of the part. He failed to interact with the people at all the levels.

Many husbands in India do not communicate with their wife regarding their investments. In India, it is believed that WIFE will not understand.

The best investors keep interacting with their people. They just don’t go out like MODI and announce demonetisation.

Lesson No. 3: - Interact with your own people. They will give you support in your BAD times or when you GOOF UP, if you have taken them in confidence from the day one.

ARROGANCE and EGO: -

Modi has not given any explanation for his moves to the people. He just did it. When he failed, then also he did not ADMIT. It was often said that BJP is a TWO MEN PARTY - MODI and SHAH.

People of the county has been given the power to elect. They have observed the arrogancy and ego of the MODI. They have taken the revenge with him.

Market has the super EGO. Buffett has many times admitted that you can’t beat the market consistently. In one or two instances you may. Buffett has the best HUMILITY and he is the UNIQUE person who has beaten the market for long years.

When market went up yesterday post-election resutls and RBI governor resignation, most people who were expecting MANDI – were baffled or should I say their EGO of being intelligent got hurt.

Lesson No. 4: - EGO is injurious when you come to the market. Just be HUMBLE.

What NEXT?

In my journey to the success, I have observed that there are N number of ways and strategies to success. But, to stay successful, there are few golden rules. You must follow them, or you will face the music like MODI. If you follow, above 4 rules, I am sure you will always remain successful in life and in investments.

I wish you all the BEST.

Follow me on Twitter @hiteshmparikh / WhatsApp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.